1. My property, which is currently let to a tenant, has risen in value and I intend to sell it. What do I need to do to discharge myself from any liability under the tenancy before selling the property?

1. My property, which is currently let to a tenant, has risen in value and I intend to sell it. What do I need to do to discharge myself from any liability under the tenancy before selling the property?

The landlord should make it clear to the estate agent, the solicitors and the potential purchaser that the property will be sold subject to a tenancy. The landlord’s solicitors will be responsible for putting relevant provisions in the agreement for sale and purchase to be made between the landlord and the potential purchaser, so that the landlord will be discharged from any liability under the tenancy. Typical provisions include declaring that the landlord has fully disclosed the particulars of the tenancy, reserving the landlord’s rights to claim against the tenant arrears of rent that were incurred before the completion of the sale, and excluding liabilities under the tenancy document on the landlord’s part incurred subsequent to the completion of the sale.

The landlord should also notify the tenant about the intended sale and properly make an agreement with the tenant to deal with the deposit. Simply transferring the deposit to the new owner will not exempt the landlord from being held liable for returning the deposit to the tenant when the tenancy expires. Upon completion, the landlord should, in exchange, obtain from the new owner an indemnity against claims on the deposit by the tenant (i.e. the landlord will be free from any future deposit claim by the tenant). Alternatively, the landlord may refund the deposit to the tenant and request the tenant to lodge the same deposit with the new owner.